Tourism will always be subject to change. As discussed in the articles on the growing popularity of Airbnb (page 5) and the state of the cruise ship industry post-hurricane Irma and Maria (page 10), the industry is one that must regularly deal with a variety of shifts in the economy and the environment. The growth of all-inclusive hotels and resorts is the latest chapter in this story.
The concept of an all-inclusive hotel is largely unique to the Caribbean. There are a few in the US and Mexico‚ and a couple further afield in Asia‚ but the majority of them are found in our region. The exact reasons for this can vary. A favourable exchange rate with many nations helps. The aquatic nature of the Caribbean also plays a role, meaning tourists are more likely to visit for a longer and more expensive stay instead of an ‘overnight’ trip‚ and also more likely to seek out beachfront hotels with watersports offerings.
The reasons for the popularity of all-inclusives are multiple. One thing for sure is what the concentration of all-inclusive hotels in the region means: for better or worse, the economic impact of changes in this area will always be substantial and unique to this part of the world.
ALL INCLUSIVES VS. NON-ALL-INCLUSIVES
For those not yet familiar with the divide between all-inclusive and non-all-inclusive, a brief recap and some context is useful. While all-inclusives can vary from one resort to another, an all-inclusive package usually includes accommodation, meals, drinks and access to non-motorised watersports equipment. In tandem with these amenities, all-inclusives are generally in resorts that provide a certain ‘theme’ or environment.
While this could make for an awkward holiday for a couple celebrating their 50th wedding anniversary at an all-inclusive resort aimed at college-aged singles, the great benefits of an all-inclusive that caters to a particular audience is the delivery of a truly tailored experience. All-inclusives have been especially appealing for families as the ability to book a holiday with the kids and then enjoy a resort without always needing to buy tickets, rent equipment, and pull out the wallet after every meal has made many holidays far less stressful for the parents.
While it has many virtues, to those who don’t like it, an all-inclusive package can be a lot like a circus tent at a festival: a lot going on inside but being enclosed can take attention away from the attractions outside. As opposed to a dedicated resort, a non-all-inclusive provider is often at its best in the heart of a city, for travellers seeking a short stay – whether a weekend getaway or an overnight business trip – and, accordingly, usually places a particular focus on its location and convenience.
On this basis alone, the difference between all-inclusive and non-all-inclusive can seem quite straightforward. It is when one considers the impact on the wider hotel and tourism industry that it becomes clear how the differences are multi-layered and complex.
ALL INCLUSIVES IN-DEPTH
The risk of the all-inclusive resorts is that the scope and reach of one hotel outpaces many other local providers. This is commonly known in business as ‘the WalMart effect’, whereby a major provider with greater resources can consolidate its hold on a market and offer more to consumers at a lower price than others, ultimately forcing previously established businesses into an unsustainable situation, or to even cease operations entirely. This also goes beyond hotels, and can impact local restaurants, bars, watersports providers, and more.
While this challenge is very real, an all-inclusive resort that can cater to many hundreds or even thousands of tourists can also help bring visitors to the Caribbean in a way that a non-all-inclusive hotel cannot. This is especially so when a hotel is part of a chain or has a partnership with other similar hotels around the world. With this comes the name recognition and celebration of a unique location – what Caribbean nation wouldn’t want a hotel in its country to feature alongside New York, Paris and Tokyo as other premier locations of a hotel chain?
There’s also the ‘known quantity’ factor. A tourist who may not otherwise feel comfortable travelling in a Caribbean nation – they may be wary of challenges like the heat, a language barrier or the difficulty of finding outings and events that match their interests – can find themselves persuaded to visit by the promise of an easy and accessible all-inclusive resort.
The rise of luxury camping (aka glamping) and adventure tourism has increasingly required hoteliers and providers to cater to niche interests in remote locations. Whether it is mountain climbing‚ river rapids riding or deep sea diving‚ certain hoteliers can provide an all-inclusive service that makes a trip seamless instead of stressful.
INTERACTION WITH BUSINESS AND COMMUNITY
It is important to recognise that the gulf between all-inclusive and non-all-inclusive is not always pronounced. Many businesses may provide an all-inclusive package that sees meals and entertainment included alongside accommodation, but do so across multiple locations and businesses. When tourists are spread across multiple premises and neighbourhoods, their incentive to interact and engage more widely with the community beyond the official all-inclusive offerings grows.
This notwithstanding, continued growth of all-inclusive offerings could risk not only the vibrancy of local business and culture around it but also the attraction of a tourism destination as a whole – at least when planned poorly. Rather than seeking to seize a greater market share temporarily‚ hoteliers could find more stable and long-term success by seeking to integrate and partner with local establishments and attractions.
This doesn’t need to come at the expense of an all-inclusive offering altogether‚ as hotels could still offer extras such as free breakfast and lunch‚ while offering all-inclusive discounts or deals with local bars and restaurants for dinners. While a renowned hotel chain can offer the tourist a certainty and peace of mind surrounding the quality of service they will receive, a concentration of all-inclusive resorts can grow the risk of ‘sameness’ in experience from one hotel to another. The first challenge is immediate, while the latter is long-term but more visible.
All-inclusives won’t always include everything‚ as the package can vary from one place to another. Similarly‚ non-all-inclusives obviously won’t cover all expenses but may offer extras like free use of a gym or heavily discounted meals in the hotel’s restaurant that may make a tourist’s non-all-inclusive trip quite comparable to an all-inclusive one.
Ultimately for tourists it is a question of preference. All-inclusives will seek to take care of everything during a visitor’s stay. For some travellers this can be the ideal, especially if age, mobility or just a sheer desire to enjoy the holiday and ‘relax to the max’ is a factor.
For other tourists, travel is all about creating one’s own unique experiences, and having the flexibility to do so is vital. That is where companies like Airbnb and creative hoteliers come in.
By contrast, non-inclusive providers must seek to maintain a competitive advantage with all-inclusive providers, while also navigating the unique dilemma Airbnb brings to tourism. Its rise means many tourists won’t seek out an all-inclusive package, or even traditional forms of accommodation when they travel, settling for a hammock or futon over a hotel room. The Airbnb phenomenon is one that poses opportunities and problems for hotels in the Caribbean generally and, whether an all-inclusive or non-all-inclusive provider, it represents a wildcard for the future of hotels all over.
As discussed more in the dedicated Airbnb piece this week (page 5), Airbnb has some unique virtues but also real problems. It is here that non-inclusive hotels can seek to make their claim, offering a service that remains affordable, casual and easy, while also providing a level of security and protection that an Airbnb provider cannot.
All up, like two wings of a bird, it’s clear that the Caribbean tourism industry is at its best when there is a strong mix of all-inclusive and non-all-inclusive offerings. With the popularity of all-inclusive resorts set to grow further, it is important for their own operations, alongside that of their local providers, that they build their offerings into the economy around them.
In turn, for non-all-inclusive providers, now is the time to also build those links, to underscore to a potential visitor that while their business may not include everything, there is ample in the surrounding neighbourhood and community to make their hotel the perfect choice.